(Reuters) - The Obama administration dropped the ball on a $1.25 billion deal to settle decades-old discrimination lawsuits with black farmers, an advocate for the group said on Friday after the government failed to meet a key deadline.

The deal, one of the largest civil rights settlements in history, was to compensate black farmers left out of federal farm loan and assistance programs due to racism.

But it was contingent on Congress approving $1.15 billion in funding by March 31. Lawmakers left for a two-week break on Friday without approving the deal, leaving it in limbo.

"The president made a strong commitment to show leadership to get this done, and basically we haven't seen him show that leadership," said John Boyd Jr., head of the National Black Farmers Association.

"The president didn't help us finish the job," Boyd said.

The deal reached last month was hailed by President Barack Obama, Agriculture Secretary Tom Vilsack, and Attorney General Eric Holder as a milestone in righting historic wrongs.

The farmers had urged the administration to declare the settlement an emergency, which would waive Congress from the so-called "pay-go" requirement to trim budgets for other programs to fund the payments.

The 2008 Farm Bill had provided for $100 million in payments. Boyd and key lawmakers met with Vilsack this week in a last-ditch effort to get the waiver for the rest.

Vilsack told reporters the administration was working through complex legal and jurisdictional issues, in part because of rules established in the Farm Bill.

"There is absolutely no hesitation on the part of this administration," Vilsack said. "We want to get these cases resolved and we will."

The missed deadline for the case, known as Pigford II, will mean black farmers face more financial hardships, Boyd said.

The original Pigford class action lawsuit, named after North Carolina farmer Timothy Pigford, was settled in 1999 after the USDA ignored black farmers' claims for decades.

In the first case, more than 13,000 farmers received payments in a package worth more than $1 billion.

But tens of thousands of farmers missed the filing deadline. The settlement in Pigford II would allow these farmers to again make their claims.

Boyd said he will now go back to his lawyers to determine whether the funding deadline can be pushed back.

The lawsuit originally sought $2.5 billion. The smaller settlement was accepted primarily because "the administration agreed to put this on the fast track," Boyd said, noting many of the farmers were elderly and had urgent need for the money.

Boyd said he has asked for a meeting with President Obama to get answers.

Senate Majority Leader Harry Reid and House Speaker Nancy Pelosi both are committed to working with Obama to conclude the case, spokespersons said.

Vilsack added the USDA would continue to work on the issue during Congress' absence. "Our hope is that as soon as Congress returns that we'll get it done," he said.

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